LONDON: Global equities slid on Thursday on auto sector woes and economic fears about the prospect of more interest rates aimed at cooling high inflation.
Share prices of carmakers were hit hard after Tesla posted tumbling first-quarter profits as steep price cuts ate into margins at Elon Musk's electric auto company.
Wall Street opened lower, with the Dow shedding 0.5 percent.
Europe's main equity markets were lower in afternoon trading, after a mixed session in Asia.
“European markets are in the red on Thursday in what continues to be a choppy week of trading driven by economic and interest rate uncertainty,“ said analyst Craig Erlam at trading firm OANDA.
Stubbornly high UK inflation and worries over more central bank moves to tame rampant consumer prices dented markets on Wednesday.
Higher borrowing costs curb consumer spending and ramp up the cost of credit for businesses and individuals alike, derailing economic activity.
“Investors are once again worried about the outlook for the global economy,“ added Russ Mould, investment director at AJ Bell.
“Markets have stalled over the past few days, with the latest corporate updates failing to move the dial.”
- Carmakers hit the skids -
Shares in Tesla slumped 7.3 percent at the start of trading in New York. Shares in Ford and GM both dropped more than four percent.
In Europe, shares in French giant Renault 8.2 percent despite strong first-quarter earnings, while Stellantis -- owner of Chrysler, Fiat, Jeep, Maserati, Peugeot and other brands -- sank 5.4 percent.
In Frankfurt, BMW shares fell nearly four percent, Mercedes-Benz 3.4 percent and Volkswagen 2.1 percent.
“Margins/demand being stuffed is not just Tesla-specific. More price cuts to come affects all,“ Finalto analyst Neil Wilson told AFP.
Patrick O’Hare at Briefing.com said “the reaction to Tesla’s report has cast a pall on the broader market along with some other disappointments.”
Elsewhere, Swedish truck-maker Volvo reported a jump in first-quarter orders and upgraded its annual sales forecast.
In the telecoms sector, Finnish group Nokia reported weaker than expected earnings as cash-strapped consumers reined in spending, sending its shares down more than eight percent in afternoon trading.
Results from US regional banks were also in focus after three went under last month and troubled European giant Credit Suisse was taken over by UBS.
Markets have in recent days been optimistic that central banks, and particularly the US Federal Reserve, will be able to wind down their rate-hiking drive soon after data showed inflation slowing down.
But investors have been jolted by news this week of UK inflation remaining above 10 percent in March owing to soaring food costs.
The news has fanned bets that the Bank of England will hike rates again at its next meeting in May.
- Key figures around 1330 GMT -
New York - Dow: DOWN 0.5 percent at 33,742.04 points
London - FTSE 100: DOWN 0.2 percent at 7,880.97
Frankfurt - DAX: DOWN 0.9 percent at 15,759.86
Paris - CAC 40: DOWN 0.4 percent at 7,516.89
EURO STOXX 50: DOWN 0.5 percent at 4,373.04
Tokyo - Nikkei 225: UP 0.2 percent at 28,657.57 (close)
Hong Kong - Hang Seng Index: UP 0.1 percent at 20,396.97 (close)
Shanghai - Composite: DOWN 0.1 percent at 3,367.03 (close)
Euro/dollar: UP at $1.0970 from $1.0955 on Wednesday
Pound/dollar: UP at $1.2453 from $1.2439
Dollar/yen: DOWN at 134.30 yen from 134.72 yen
Euro/pound: UP at 88.10 pence from 88.07 pence
West Texas Intermediate: DOWN 2.1 percent at $77.49 per barrel
Brent North Sea crude: DOWN 2.2 percent at $81.32 per barrel - AFP
Source: The Sun Daily
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